Posts Tagged ‘Electricity’

Energy can be explained by using two different perspectives. Energy as system can be explained using supply demand model (SDM), while energy as transition system can be explained by using technological transition (TT).

Energy from SDM Perspective
The use of energy system model might help to have better understanding on present and future demand supply interaction, energy environment interactions and energy system planning.

Energy from TT Perspective
From TT perspective by using MLP energy also can be explained. The counter argument of transitional perspective is on technological change perspective.

A. Pricing
Energy pricing is indirect tool for reducing emissions, attractiveness of this tool depend on cost of monitoring and enforcement. An analysis of various energy type (electricity, coal, diesel, natural gas) with respect to various pollutant (TSP, SOX, NOX, VOC, CO) indicated that there is a relation of energy composition and pollutant composition, which can be argued that there is a model/tool that can reduced the pollution with main consideration: price (Eskeland, 1994, World Bank)

From marketing point of view, there is two option in promoting the issues of electricity:
1. Build New 35,000 MW
2. Double the capacity
3. Other Alternative e.g Increase Electrification Ratio.

Double the capacity actually is more interesting, because several reasons:
1. It means that average 20% growth / year.
2. It means that current capacity (might be 43.4 GW according to RUPTL, or 50,7 GW RPJMN) will be used as baseline (which is very difficult to find a baseline)

What media response?
Well, vary, from inaccurate current capacity (e.g 53 GW, 44 GW) to inaccurate timeline (e.g 2019, 2020, 2024). Some inaccuracy due to unclear information but I think another inaccuracy due to the number is extremely big.

First, Wow, I can not imagine if the study is undertaken without technology called Internet. All the documentation is available in Judicial Body, NGO, or third party information. And second, at the fundamental level is about the writing, the spirit to documenting and communicating message. Beautiful.

Background of Conflict
Let me begin with Electricity Law 30/2009, 15/1985 version and 20/2002 version. The spirit of this Electricity Law is liberalization and privatization of electricity sector which is very complicated. The level of complexity is similar with Hukum Waris (Inheritance), which is complicated as old money. In 30/2009 the significant difference is on Article 11 that Power Sector can be from State Own or Private Sector. Imagine, that our parents died, they left a big house, their children needs to decide which is the best option for that big house. If they have three children, first children might choose to sell the house, second children might choose to repair the house, the third children might choose to bring the partner into the house. Which one is correct? any approach can be correct, as any approach might be incorrect depend on the position.

in Financial Sector Restructuring for example, IMF itself stated in their report of 1999 Financial Sector Restructuring that “The policy is successful in all countries, except in Indonesia, where economic and political turmoil made the situation unmanageable during the first six months”. See, even IMF itself emphasis on the importance of political stability. Check also IMF working paper on 1997-1999 Banking Crisis

Environmental PerspectiveAgus Sari argues (in 2000?) that “power sector in Indonesia is not ready for restructuring, tariff structure has gained the most interest due to the populist political agenda, and environmental issues gain the weakest support from due to involved in any discourse led by international financial institutions which in debt-laden Indonesia, this politically-incorrect”

Academic Perspective
Written by same Agus Sari “Indonesian power sector restructuring was influenced by the 1997 financial crisis and ongoing economic crisis both stimulated and complicated power sector restructuring. The collapse of the currency bankrupted the national electric utility; on the other hand, it made constituencies for labor (PLN employees union) and consumers (students and NGOs) more likely to oppose any reform that implied job losses or price increases.” Moreover, Power Sector Restructuring is argued has been started since 1989 where IMF recommend privatization and Soeharto approves first IPP in 1990

Historical (Sequential) Perspective
The historical perspective of Indonesia Restructring start with argument that there is no ‘smart/genius’ president, all the leader has the same capability.

We, Indonesian are very proud with the fact that we have 17,508 islands (1987), this is the number that I remember most of the time. Although in my childhood (1980s) I remember it as 13,000 islands, which according to LAPAN (2002) is 18,307 islands. From electricity perspective, our electricity production is 216189 Gwh (78.3% in Java Island and 75.8% is owned by PLN (State Owned Enterprise). From unit perspective we have around 4925 power plan which 89.8% of it are Diesel PP (4422 unit).

Java is the biggest islands, 56,7% population is here, with population around 141-145 million, if its a country its a ninth or tenth biggest in the world, if compare with islands it is the biggest (Honsu Japan 2nd, Great Britan 3rd)

Economics is difficult topics. Whether economics of money, economics of environment, or economics of energy. Sample below indicating that various measurement can be made by different institution with different approach. And making policy based on this scientific calculation is difficult. Well let say challenging.